Startup of The Month: Unfold

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John Purcell is the president and CEO of Unfold. (Photo courtesy of John Purcell)

Breeding Seeds For Vertical Farms

December 3, 2020

By Russell Nichols

The future of vertical farming begins on the genetic level. That’s the philosophy of Unfold, a Sacramento-based startup focused on innovating fruit and vegetable seeds to better serve indoor growing facilities.

Vertical farms use artificial light and take up less space than traditional farms. They are automated to control factors such as light, temperature, and humidity. With a biochemistry background, John Purcell, president, and CEO of Unfold recognized a gap between open fields (and greenhouses) and controlled environments. He heard from many vertical farmers that seeds intended for outdoor use didn’t work as well indoors where plants are grown on shelves.

“They’ve made so many investments on lighting and mechanics, but they were trying to get by with seed varieties that were developed for other production systems,” Purcell says.

Unfold aims to fill that gap using seed genetics (germplasm) from vegetable crops to create new varieties best suited for vertical farms. The startup’s bimodal strategy begins with a screening phase, analyzing which germplasm yields optimal results, followed by a breeding phase to develop the varieties that thrive in a controlled environment.

With urban living and organic food becoming more popular, the vertical farming industry has been booming globally. In 2019, the market reached about $4.4 billion, according to Statista. By 2025, the market value is expected to hit $15.7 billion. Using vertical spaces increases the amount of yield per square foot or per acre while being able to grow food closer to the consumer. Because these farms are automated, they require less labor to run, which is also attractive, given the labor shortages in agriculture, Purcell says.

Purcell previously worked as senior vice president at Bayer and head of vegetables research and development for its Crop Science division. He also spent nearly 30 years at Monsanto Company, acquired by Bayer in 2018. His team will be exploring questions such as: How does a plant respond to artificial light? How fast does a plant grow with no disease or insect pressures? What kinds of varieties have proved to be successful already?

Lettuce greens will be the first crop tested because they are the biggest crop grown by indoor farmers — 57 percent of indoor farms, including vertical farms, produce leafy greens, according to the Agrilyst 2017 “State of Indoor Farming” report. In the future, Unfold also plans to examine other crops such as tomatoes, peppers, and cucumbers.

But vertical farms aren’t all the same. They use similar core technology (lighting, temperature, humidity), but the setups vary. The lack of standardization in the market presented a challenge, which is why Unfold is also providing a crop model (a “digital recipe”) to growers to define how to set up the various parameters for optimal results.

Unfold launched with $30 million in initial funding and an agreement for certain rights to germplasm from Bayer’s vegetable portfolio. The funding is meant to help the startup fast-track tailor-made seeds to the vertical farming industry, says Derek Norman, vice president of venture investments for Leaps by Bayer, the company’s impact investment division.

“Everybody saw the sector as high potential but relatively small today compared to traditional vegetable growing,” Norman says. “Vertical farming hasn’t commanded the same resources.”

In 2021, Unfold plans to have its facility secured and the breeding program established. For Purcell, the initial investment plus the advantage of a license agreement to tap into Bayer Crop Science allows Unfold to “hit the ground running, providing solutions,” he says.

And what better ground for an agtech startup is there than Sacramento? Purcell chose the Capital Region because he recognized it as a center for agricultural innovation and a great hub for seed companies like Unfold. “Not a whole lot of better places, especially for horticulture and produce,” he says. “There’s such a robust ecosystem.”

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Agtech Sector Blooms As More Dollars And Startups Rush In

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Christine Hall | August 20, 2020.

Twitter: ChristineMHall

Farming has been around for thousands of years, but investments and startup activity in agricultural technology, commonly known as “agtech” or “agritech,” have only exploded over the past five years.

In fact, in each of the last two years, venture capitalists invested $4 billion in startups in the agtech space, according to Crunchbase data. Based on the $2.6 billion already given out as of Aug. 14 of this year, 2020 is poised to repeat or even exceed the previous years.

Better Food Ventures Partner Seana Day began tracking agtech startups more than five years ago. She said that farming is an area that isn’t typically tech-enabled. In fact, COVID-19 reminded the world about the food supply chain, she added.

“There was a disconnect between demand signals and supply, which is why you saw empty grocery shelves,” she said. “At the same time, the dairy farmers were dumping milk because they didn’t have a process in place to massively produce small consumer packaging.”

Day estimates that global food and agriculture fund managers have about $130 billion in assets under management, which is driving a surge in investments as well as a shift in thinking.

Farmers have historically been resistant to change, Day said, but at the end of the day, they are rational business people. That means that if a startup can show a farmer a product or service that will boost the return on investment—increasing revenue or decreasing costs—the company will have a better chance of making the sale.

The challenge comes in for tech companies that offer apps meant to save time and increase job productivity, areas that aren’t necessarily needed for farmers, she added.

There is also a shift in legacy food companies thinking digitally. Day points to Tyson Foods as an example. The meat producer earlier this month promoted Dean Banks to CEO. He joined Tyson as president last December from Alphabet’s high-tech incubator X.

“That is a huge signal from a company making bold moves, saying ‘we want to be a leader in this space,’” Day added.

New investments

This year has been particularly busy for the agtech innovation sector, as startups secured both big and small investments.

One of the largest went to Farmers Business Network, which raised $250 million in Series F funding earlier this month. Day said the San Carlos, California-based company was one of the pioneers in e-commerce models, helping farmers optimize their financial performances by finding demand for supply.

Meanwhile, Berkeley-based Pivot Bio announced a $100 million funding round in April, led by Breakthrough Energy Ventures and Temasek, to scale its microbial nitrogen technology. The company said the technology increases crop yields, and in turn, farmers’ revenues. Biodesign startup Geltor brought in $91.3 million in a Series B round in July, led by CPT Capital, to make proteins, such as collagen and elastin, but without animals. The startup’s products are used in beauty, and food and beverage products.

One of the newest is iFarm, a Finland-based startup providing indoor farming technology for growing fresh greens, berries and vegetables. On Thursday, it announced that Gagarin Capital led its $4 million investment with other investors including Matrix Capital, Impulse VC, IMI.VC and several angel investors.

iFarm, founded in 2017, has more than 50 ongoing projects with clients in Europe and the Middle East for 2020, Max Chizhov, co-founder and CEO, told Crunchbase News. The company will use the funding to develop its iFarm Growtune tech platform; expand into new regions in Eastern and Northern Europe and the Middle East; and will experiment with growing strawberries, cherry tomatoes, sweet peppers, radishes and other crops.

“We think this is an interesting time to be in agtech, and we think we are in the right time and right place, especially as there is more attention on food and agtech and a pipeline of investments,” Chizhov said. “We are focusing on how to change the supply chain, and we believe we are one of the solutions to solve this problem.”

Last week, we also reported on a new company, Unfold, which is focused on vertical farming. Bayer’s investment arm, Leaps by Bayer, and Singapore-based investment firm Temasek infused $30 million into the new company.

Unfold’s President and CEO John Purcell said he is bullish on the farming sector, seeing a need for genetics in vertical farming. The company has an agreement for certain rights to germplasm from Bayer’s vegetable portfolio that includes lettuce, spinach, tomatoes, peppers, and cucumbers.

“Technology has to catch up with the promise,” he said. “There has been an overall trend in produce moving toward vertical farming and greenhouse, but the hard part is you have to have the tech to make it feasible.”

The “tech” in question is lighting, mechanics and a system in place. Then it has to be competitive with the other forms of production so potential customers will see its value, Purcell added.

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New areas of agtech

Purcell sees three promising areas for the agtech industry:

• Major urban areas, where there is a desire for local, fresh food;

• Self-sufficiency, or helping places where there is limited arable land; and

• Produce supply chains, or getting food from the farm to fulfillment centers.

Ashley Tyrner, founder and CEO of Farmbox Direct, thinks there should be one more area: food as medicine. She is in the process of raising $10 million for her East Coast-based organic and natural produce delivery service.

Tyrner said she saw her business grow more than 2,000 percent during COVID-19. In that time, Farmbox also began working with Medicare to provide box services to patients identified as those who need to eat healthier to manage chronic disease.

“The climate has changed in Silicon Valley, and VCs are welcoming because we are doing food as medicine,” she added. “We were the first to find an insurance company to work with us to help patients change their eating patterns. We are creating a new space here.”

In the area of crop protection is Canada-based MustGrow Biologics, an agricultural biotechnology company taking natural compounds from mustard seeds and turning them into pesticides that fortify the soil.

The pesticide industry is valued at $65 billion, but most are synthetics, Corey Giasson, president and CEO of MustGrow, told Crunchbase News in an interview. The biologics side of the pesticide industry is growing, but is still worth only about one-sixth that amount, he said.

The slower growth is due to biologics in the past not being as effective as synthetic fertilizers, so MustGrow has been doing a lot of studies to show that its product works.

“Farmers want to use products that are healthy and safe, but need something effective to grow a crop that will suppress pests,” he said. “We also have a growing population globally, and we need to feed people, doing it in a safe, environmentally sustainable way.”

New opportunities

Crunchbase data shows that is the most active agtech venture investor, having made 20 venture investments in the agtech space since it was founded 10 years ago. It was most recently involved in India-based Intello Labs’ $5.9 million Series A round. The company uses image matching and machine learning to measure the quality of crops.

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A new player is FTW Ventures, led by Brian Frank, who on Thursday announced he is raising his first “problem-focused fund” aimed at early-stage food and agricultural startups.

Frank already raised the $4 million fund, in which he will invest in 15 to 20 deals at about $200,000 to $250,000. He has already made five investments, the most recent in April as a part of Plantible Foods’ $4.6 million seed round. He was also an investor in Plantible’s pre-seed round. The San Marcos, California-based B2B food technology company is developing plant-based protein.

Frank predicts some of the hotter areas will include hardware and automation, software and SaaS, novel products–such as Plantible–and personalized nutrition. He also said that consumers are driving the way food makes its way from the farm to the fork.

“I came into this sector from mobile technology, artificial intelligence, and machine learning, with a deep-seated passion for food,” he said in an interview. “There is a major shift in consumer trends as they look for more resilient and sustainable food. Climate change is both an effect of food and it impacts food. Plants can’t just move to a new climate, so we need to help them.”

Illustration: Dom Guzman

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Horticultural Team Sheds Light on Growing Sea Beans in Shipping Containers

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By Tony Bertauski

June 20, 2020

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Sea beans grown in a hydroponic system which feeds the plants a layer of nutrient solution on a timed schedule. Lindsey Clarke/Provided

Trident Technical College horticulture students Lindsey Clarke and Clara Wooters work at an unusual farm located inside 40-foot-long shipping containers.

For more about Heron Farms, visit www.heronfarms.com.

Sam Norton is the founder of Heron Farms. He did his graduate research on halophytes, which includes sea beans, also known as sea pickle. He’s not your typical farmer. He wears a white lab coat and nitrile gloves. He’s more of a farming scientist and, like many good scientists, affectionately refers to the crop by its genus rather than common name, Salicornia.

Sea beans are succulent halophytes that don’t produce beans or pickles. The foliage is edible and salty. Succulents are plants that store water in their leaves. Halophytes tolerate saline conditions. And as halophytes go, sea beans are among the saltiest.

Sea beans grow in hypersaline soils that are uninhabitable for most plants. They are the first plant into a barren salty flat. As it pulls salt from the soil, it transforms the ground into a habitable region for other plants and, over time, sea beans are crowded out. As a crop, this makes it difficult to farm outdoors.

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The halophytes pull salt from the soil, which transforms the ground into a habitable region for other plants. Lindsey Clarke/Provided

A shipping container can grow 4,800 plants. While sea beans are their main crop, they are growing four new halophytes and plan to grow as many as 35. They use a hydroponic system called nutrient film technique that only uses 20 gallons of water a week. Plugs of sea beans grow in plastic channels, or gutters, three inches apart. A thin layer of nutrient solution cycles through the channels on a timed schedule.

The foliage tips are harvested three times from seed to the final cut in 60 days. These are the fleshy parts that can be cooked or eaten raw. The stems are woody and don’t have much of a culinary use, but breweries have used them in gose-style beer for a salty flavor.

With a proficient research background, Sam is maximizing production within the confines of a shipping container. He and his team follow every plant, from seed to harvest, and study the effects of light, nutrients, spacing, and other environmental factors.